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Fan Yang

EUR/USD Approaching Critical Resistance Area around 1.25

The US Dollar has been weak lately across the board. EUR/USD has been on a bullish for most of 2017 and now into 2018. Let's take a look at the weekly chart, where we will see a reason this rally will likely stall as it approaches 1.25.

EUR/USD Weekly Chart

(click to enlarge)

- The weekly chart shows that as price approaches 1.25, it is going to be challenged by a falling trendline going back to 2008. 
- It is also testing the lower part of the consolidation structure since 2008, or arguable since 2006. 
- Finally, the RSI is above 70, which is overbought. Moreover, it is potentially creating a bearish divergence with price. 
- These are signs we might see some consolidation around 1.25, with downside being 1.20. 

Also note that USD/JPY is approaching a key support. If it finds support here, the EUR/USD will likely find resistance around 1.25. IF USD/JPY tumbles below 108, then EUR/USD will have a better chance to break above 1.25. 

USD/JPY Weekly Chart

(click to enlarge)

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